1. INTRODUCTION TO RETAIL PRODUCT MANAGEMENT: SCOPE AND CONCEPTS
CHAPTER 1
INTRODUCTION TO RETAIL PRODUCT MANAGEMENT:
SCOPE AND CONCEPTS

2. LEARNING OBJECTIVES To define retail product management
To explore what retail product management includes and entails (scope)
To understand what aspects of product management take place where within a retail organisation
To understand the role of product management within an overall retail strategy

3. BASIC CONCEPT: The Product
Types of Product
complex tangible
convenience tangible
information based
service
The retailer’s product offer (usually): physical goods, with services
Different types of products require specific product management approaches

4. BASIC CONCEPT: The Retailer
The entity at the penultimate position in a distribution/marketing channel, that sells to the final consumer
Functions:
breaks bulk (distributor of small quantities)
editor of product range
provides goods in convenient location
finances stock
The term retail sector has been used to refer to a type of retailer, based principally on the product offer.

5. Figure 1.1
To Add

7. THE STRATEGIC ROLE OF PRODUCT MANAGEMENT
Retailers are close to consumers so they are in the best position to understand their changing needs
product and shopping needs and preferences
short term and long term changes
Retailers add value to the product (e.g. display, information, after sales service)
Retailers form close relationships with customers (generate loyalty)
analysis of information (gathered electronically) provides insight into customer purchasing habits
retailers develop a ‘retail brand identity’

8. THE STRATEGIC ROLE OF THE PRODUCT RANGE
Captures customers’ interest
Communicates what a retailer’s business is all about
Provides the reason for a shopper to choose one outlet over another in a crowded market (differentiates)
Positions a retailer relative to competitors

9. RETAIL POSITIONING
A retailer’s place in the market relative to competition (or ‘ideal’)
The basis upon which a retail offer is ‘measured’ by customers
Positioning attributes:
price
product assortment
convenient to use / visit
service quality
The product range has a strong influence on customer perception and retail outlet choice

10. GENERALIST VS SPECIALIST
Provides solution or near solution to mass needs
Wide range (large number of product categories)
Limited assortment (shallow)
Well known brands and product varieties
Provides solutions to specific needs
Smaller number of product categories
More choice within the category (depth)
Extensive choice of brands and/or product variations

11. Figure 1.2 Different product assortment strategies
To Add

12. PRICE POSITIONING Price is a very effective positioning attribute
premium prices / added value (e.g. product quality or service)
low price / little added value (e.g. basic selling environment and service)
Variable price positioning within a general offer:
use of tiered pricing and sub-brands to pitch specific product ranges to customer groups
e.g. Tesco Value, Regular, Finest

13. THE SCOPE OF RETAIL PRODUCT MANAGEMENT
Making products available
Presenting products appropriately and attractively
Small retailer: all carried out by owner manager
Large retailer: central buying office
strategic product management (directors and vice presidents)
operational product management (buyers, merchandisers)
outlet level product management (store personnel)

14. STRATEGIC PRODUCT MANAGEMENT
Provides the planning guidelines
Direction of growth (e.g. introduction of new product ranges, extending successful ranges, rationalising less popular products)
Positioning in market (e.g. which customers to target and how)
Setting financial objectives: sales, profits, productivity and control of costs
Assessing and managing risks associated with new product ranges

15. OPERATIONAL PRODUCT MANAGEMENT
Translate ideas into feasible plans
Select and manage suppliers
Select products and brands
Make products available (forecast, order, arrange delivery)
Communicate the product offer (promotions, advertising)
Set prices
Decide where and how to display products

16. PRODUCT MANAGEMENT WITHIN THE OUTLET
Implement operational plans
Allocate display space and arrange products
Organise in-store marketing
Match product features and benefits to customer needs and desires (personal selling)

18. FIGURE 1.5
BALANCING BENEFITS AND COSTS TO CREATE VALUE